“Can anyone explain to me how the Italian banking crisis, which has been swept under the rug for years, fits the liberal American, Bernie/Warren narrative that greedy and reckless U.S. mortgage lenders and Wall Street’s greedy and fraudulent securitization of these “risky” mortgages caused the financial crisis? As I understand it, Italy didn’t have a housing bubble/bust…

Meanwhile, a smaller troubled bank, Banca Carige , which had also been keeping fears of financial crisis alive, announced a capital raising and bad-loan sale plan that sent its shares up 30%.

These solutions came swiftly after the state-backed sale to Intesa Sanpaolo of two banks in the Veneto region, which had been casting a shadow over the financial system. Italian bank stocks have rallied sharply, outperforming European rivals significantly since mid-June.

Between them, these events promise to take almost €50 billion of bad loans out of Italy’s banks, leaving about €275 billion in the system. However, UniCredit has pledged to sell €18 billion worth as part of its restructuring; and €57 billion are on the books of Intesa Sanpaolo, which as Italy’s healthiest bank is well placed to deal with them.

Italy’s problems are starting to look less dramatic. Yes, the country could have dealt with its weak banks sooner and in a less complicated way had there been the political will. But it has now neutralized its worst problems at a direct cash cost to the taxpayer of less than 1% of GDP—significantly less than Spain or Ireland spent several years ago.

And loans are turning bad at a slower rate: New bad debts at the 15 biggest banks in 2016 were at their lowest since before 2009, according to rating agency DBRS.

Now banks have the capacity to start lending again: Italian banks finally returned to growth in the first quarter of 2017, along with the banks of Germany and France, after years of near constant balance-sheet shrinkage.

Growth in those three countries turned the tide for the eurozone as a whole. Total eurozone bank loans were still shrinking at an annualized rate of 11.6% of GDP in the first quarter of 2016 and 3.8% in the last quarter of that year, but that became annualized growth of 1.4% in the first quarter of 2017, according to UBS.

Italy, long the source of worries about European instability, might finally be aiding the Continent’s recovery.